PETALING JAYA: Consumers in the B40 (lower income) and M40 (middle income) groups will be affected by the increase in the sales and service tax (SST) despite being exempted directly, says MCA president Datuk Seri Dr Wee Ka Siong.
Although those who use less than 600 kilowatt-hour of electricity a month would be exempted from the rise in the SST rate from 6% to 8%, he said the fact that the two percentage point increase applies to commercial entities means that it would still indirectly impact B40 and M40 groups.
“The B40 group would be affected by the increase in SST. Why? Factories, warehouses and shops will increase their rent, which will affect the price of goods. Who will bear the increased cost? The people.
“So this is the effect that it has on consumers,” he said in a video posted on Facebook on Friday.
Dr Wee used a spoon as an example: While its original price is RM5, the increase in the SST will have a snowball effect because the factory that made the spoon, the warehouse that stored the spoon, and the shop that sold the spoon would all charge more at every stage.
“Can there be a guarantee that the price of the spoon will remain at RM5 after the tax increase?” he asked.
“Now that logistics cost incurs 6% [tax], bringing in raw materials from afar will cost more. And don’t forget that services like the tugboat and the container haulier will have a 6% SST,” he said.
“It will all add up. And who will be affected the most? The average consumer,” he added.
